CAF-6 · Chapter 11 · Question 9 of 15
According to IAS 33, what must an entity do if a potential ordinary share is anti-dilutive?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Exclude it from the calculation of diluted EPS.
Explanation
IAS 33 strictly prohibits the inclusion of anti-dilutive potential ordinary shares in the calculation of diluted EPS to ensure users are shown the worst-case scenario.
More IAS 33 Earnings per share MCQs
- Q11Where must an entity present its basic and diluted earnings per share?
- Q12If a company undertakes a share split after the reporting period but before the financial statements are authorized for issue, how should…
- Q13When calculating diluted EPS, share options are assumed to be exercised:
- Q14What is the primary objective of IAS 33 Earnings Per Share?
- Q15Zeta Ltd reported a profit of Rs. 1,850,000 and has 1,000,000 basic shares. It also has convertible options that would add Rs. 84,000 to…